When Takahito Aiki took over for Mike Serbinis earlier this year, we knew from his reputation as a turnaround specialist that Kobo could be making some changes in pursuit of profitability. Kobo subsequently laid off 63 staff, and now they're cutting back on their hardware investments.
Kobo Europe sales director Throsten Schroer is on the record as saying that the tablet market was "a very difficult market in which all manufacturers have to fight". This has led Kobo to decide not to replace the 3 Android tablets they launched last year, thus ending (for now) Kobo's 3 year long experiment with Android tablets.
This move makes a lot of sense. For some time now I've been saying that the market is glutted with decent tablets. This has led everyone from Amazon to Google to scale back their efforts; Amazon still hasn't leaked a 7" tablet yet this year, and Google has only just now sent a new 7" tablet through the FCC.
So long as Kobo had a sugar daddy, they could have ignored market trends and continued to make the huge capital investments necessary to bring new hardware to market, but now that Kobo has to become profitable that's no longer possible.
And from the sounds of it, I don't think Kobo is going to be launching any new ereaders in the near future, either, which means that the recently launched Kobo Aura H2O could be Kobo's only hardware launch in 2014.
Again, that's not such a bad idea, and it ties in with Kobo's need to get the biggest bang for their buck. As I pointed out when I covered Kobo president Michael Tamblyn's interview last month, Kobo has had to be nimble and focus on areas where the big guys aren't investing any time or money. And with the market full of budget and mid-priced ebook readers, that left one place for Kobo to go: up market, with premium 6.8" ereaders like the Aura HD and the Aura H2O.